Our resilient industry will remain strong, deal or no deal

BVRLA's Gerry Keaney writes for Fleet Leasing magazine

Deal or no deal? That is the question.

The deadline for the UK to agree an exit deal with the EU is looming every closer. We are now only weeks away from the October deadline and the momentum for scenario planning appears to have ramped-up across Whitehall ‘just-in-case’ we face a no-deal outcome.

Although policymakers and politicians are busy negotiating and scenario planning, all whilst navigating choppy unchartered waters, the vehicle leasing and rental industry is carrying on calmly with business as usual, safe in the knowledge that whatever the outcome, we will remain resilient and strong.

The BVRLA’s recent economics report revealed just how strong our industry is, earning an estimated £37.3 billion in turnover through its leasing and rental activities in 2017. Leasing of vehicles provided the most business for the industry, accounting for 85% of its revenue. Cars were the biggest earner compared to other vehicle types, with customers leasing or renting cars delivering 66% of total revenue. These are impressive figures.

The automotive industry has always been dynamic, innovative and responsive to change, au-fait in the art of surviving, and indeed thriving, in the face of fast-paced economic, environmental, political and technological change. This was the case before we joined the EU and it will continue to be the case after we have left, deal or no deal.

Our contribution to UK PLC

Last month we published an independent report, produced by Oxford Economics: The economic impact of the motor vehicle leasing and rental industry and it makes for impressive reading.

The vehicle rental and leasing industry makes a significant direct contribution to UK GDP, contributing around £49 billion per year to the UK economy, supporting over 465,000 jobs and generating £7.6 billion in taxation annually.

The £49bn takes account of the operations of the industry itself, the UK-made vehicles and engines it purchases, the activity of UK dealerships and its impact on the used car market.

Our industry directly employs 52,700 people, making us a larger employer than the UK’s mainline rail transport services sector. From the £37.3 billion turnover generated last year, the industry generated £23.9 billion in gross value added for the UK economy, greater than that of food product manufacturers, insurance and pension funding, and manufacturers of metals and metal products.  

Rental and leasing companies spent an estimated £30 billion on buying over 1.8 million vehicles in 2017, which includes £5.4 billion spent on 304,000 UK-assembled cars, vans and trucks. This represents 17% of all vehicles assembled in the UK and means that they were responsible for 83% of these vehicles sold domestically. The industry also purchased 418,900 vehicles with UK-made engines.

Most vehicle purchases are conducted through motor dealers and in 2017, this activity supported a £1.6 billion contribution to GDP, 25,400 jobs and £400 million in tax receipts for the UK Government.

Similarly, the rental and leasing industry is estimated to have replenished 25% of its fleet in 2017, supporting auctioneers and dealerships and generating a £1.7 billion to GDP, 28,200 jobs and £469m in tax receipts.

Our impact throughout the regions

By purchasing so many UK-made vehicles and engines, the rental and leasing sector supports an estimated 78,000 jobs at major manufacturing plants in Ellesmere Port, Sunderland, Oxford, Swindon, Bridgend and Dagenham, as well as the extended supply chain.

The vehicle rental and leasing industry makes an important economic contribution right across the UK, with the largest regional GDP contributions being in the South East and the North West, both contributing £6.7 billion, followed by London at £5.5 billion and the Midlands at £5.3 billion.

In terms of jobs, the industry’s biggest impact came in the West Midlands, where it supported 55,100 jobs, and the North West, where it supported 53,800.

Our Oxford Economic report underlines the important role that the rental and leasing industry plays across all regions of the UK and the wider economy. I am proud to be part of such a dynamic industry and together with our members, the BVRLA will continue to protect the interests of our industry to ensure that we continue to prosper and thrive, post-Brexit.

Author

Gerry Keaney

Chief Executive, BVRLA

Gerry joined the BVRLA in May 2013.